ANNUAL REPORT 2020 FINNLINES 2020 3 Contents
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ANNUAL REPORT 2020 FINNLINES 2020 3 Contents Highlights 2020 2 CEO’s Review 4 CFO’s Review 6 Business concept, values and strategic goals 8 Business environment 1010 Shipping and Sea transport services 1313 Passenger services 1414 Port operations 1717 Environment and safety 1919 Human resources 2323 Financial Statements Board of Directors’ Report 2626 Consolidated statement of comprehensive income 3030 ConsolidatedConsolidated statement of financialfinancial position position 31 ConsolidatedConsolidated statement of changeschanges in equity 3232 Consolidated statementstatement ofof cashcash flows flows 33 33 Profit andand lossloss account,account, ParentParent Company 3434 BalanceBalance sheet, Parent Company 3535 w Cash flowflo statement,statement, ParentParent Company 36 Five-year keykey figures figures 37 CalculationCalculation of key ratios 3838 QuarterlyQuarterly data 39 Board’sBoard’s Proposal 4040 Auditor’sAuditor’s Report 4141 Corporate Governance Statement 4343 Board of Directors 4848 Executive Committee and Board of Management 4949 Finnlines fleet fleet 50 Contact information 5252 Operating areas 5252 The Grimaldi Group 5353 4 Finnlines is a leading shipping operator of ro-ro and passenger services in the Baltic Sea, the North Sea and the Bay of Biscay. The Company’s passenger-freight vessels offer services from Finland to Germany and via the Åland Islands to Sweden, as well as from Sweden to Germany. Finnlines’ ro-ro vessels operate in the Baltic Sea, the North Sea and the Bay of Biscay. The Company has subsidiaries or sales offices in Germany, Belgium, Great Britain, Sweden, Denmark and Poland. In addition to sea transportation, the Company provides port services in Helsinki and Turku. Finnlines is a part of the Grimaldi Group, one of the world’s largest operators of ro-ro vessels and the largest operator of the Motorways of the Sea in Europe for both passengers and freight. This affiliation enables Finnlines to offer liner services to and from any destination in the Mediterranean, West Africa as well as the Atlantic coast of both North and South America. FINNLINES 2020 1 Highlights 2020 Key financial figures Revenue EBITDA Interest-bearing debt Equity ratio EUR million EUR million EUR million improved to * 484.0 140.8 331.7 60.7% * Excluding leasing liabilities. Revenue by function Freight Services Passenger Services Port Operations EUR million EUR million EUR million 422.8 39.0 42.8* * Including internal revenue between the segments EUR 20.6 million. Result before interest and Breakdown of external Revenue 2016–2020 taxes (EBIT) 2016–2020 revenue 2020 EUR million EUR million 600 100 88% 8% 500 80 4% 400 60 300 40 200 100 20 Freight Services Passenger Services 0 0 16 17 18 19 20 16 17 18 19 20 Port Operations IFRS IFRS EUR million 2020 2019 Revenue 484.0 574.8 Result before interest, taxes, depreciation and amortisation (EBITDA) 140.8 169.8 Result before interest and taxes (EBIT) 76.2 104.8 Result for the reporting period 69.7 98.3 Equity ratio, % 60.7 58.5 Interest-bearing debt, MEUR* 331.7 372.2 Net gearing, % 45.5 50.8 * Excluding leasing liabilities. Key operational figures Finnlines transported in 2020 cargo723,000 units cars154,000 tons1,107,000 of non-unitised freight passengers501,000 2 Finnlines continues to secure vital sea transports The current coronavirus pandemic has taken the world by surprise and challenged governments, Our largest ro-ro vessels societies and economies globally. have the capacity to carry trailers Finland’s island-like location, and its dependence on per sailing. sea transportation require frequent and regular liner traffic services. With more than 170 departures each 300 week and with a fleet of 21 ships, Finnlines has been ensuring that the flow of supplies continues to run Our largest ro-ro passenger vessels smoothly in these exceptional times. Finnlines is an have the capacity to carry integral part of Finland’s security of supply. passengers Despite the pandemic, Finnlines is looking far into per sailing. the future and making investments in energy efficien- cy and eco-efficient services. In the future, Finnlines 554 trailers will be in an even better position to respond to both per sailing. customers’ and society’s needs and to also continue to ensure high-quality sea transport services. 250 Strategic expansion Significant investments in the fleet Finnlines has invested over EUR 1 billion in the past decade and will invest over EUR 500 mil- lion in new technology, digitalisation and green shipping in the coming years. Finnlines will determinedly continue to implement its strategy. The EUR 500 million newbuilding pro- gramme proceeded as planned during the year, and all three hybrid ro-ro vessels are now at the produc- tion stage. Finneco I will be the first vessel to be completed and is scheduled to start operation in November 2021. The design process of the Superstar ro-pax ves- sels has also continued. In the design, particular at- The Superstar ro-paxes’ interior design draws inspiration from tention has been paid to fast and efficient cargo han- the archipelago. dling. These vessels, intended for the route between Finland and Sweden, will together provide over 40% more cargo capacity than today. In addition, special in the interior layout and lighting, for example. The panorama attention in the design has been devoted to a new windows let in plenty of light and offer spectacular views over kind of customer experience and a pleasant stay the archipelago. onboard. The Superstar ro-pax vessels exploit technology Ballast water management and digitalisation. Furthermore, recycling and envi- In addition to vessel orders, the Company has started instal- ronment friendliness onboard extend from the ves- lation of ballast water treatment equipment on ships. The sel’s technical details to choices of materials and project will be completed in 2023. Ballast water is used to trim products, partners, and even up to the service con- and stabilise ships, but it may carry harmful aquatic species cept. The source of inspiration for the interior decora- which out-compete native species, disrupting fragile marine tion has been the archipelago sea which is reflected ecosystems. FINNLINES 2020 3 CEO’s review Finnlines invests EUR 0.5 billion in Green vessels and for long-term growth – Safeguarding National Emergency Supply with emission-free technology 2020 was operationally an extremely challenging year, Despite these exceptional times, the shipping sector and the global Covid-19 pandemic demanded extraordinary as a whole has guaranteed reliable transport links globally response and efforts from all of us. International trade fell between markets and continued to keep essential sup- throughout the business segments and passenger travel ply lines open. Likewise, Finnlines has maintained critical has plummeted due to the travel restrictions imposed sea bridges between Finland and Sweden and between to hinder the virus’ spread. The Covid-19 pandemic has Finland and Continental Europe, Russia and the UK as well. changed the world, and like any other shipping operator, Finnlines has since 1947 played a vital role in supporting Finnlines also suffered from the slowdown in global trade. national exporters and importers. It has become evident that carriers like us, provide a lifeline to both the private According to the Finnish sea transport statistics, and the public sector in Finland. Finnlines alone transports Finland’s total sea freight volumes amounted to 101.3 mil- more than a third of the one million rubber-tyred units, i.e. lion tonnes in 2020. Total shipping decreased by 5.3 million trucks and trailers, which move annually across Finland’s tonnes compared to the previous year’s figures. Exports three main sea bridges, Finland–Estonia, Finland–Sweden decreased by 5.8%, totalling 50.2 million tonnes. Imports and Finland–Germany. Finnlines is a critical player in trans- decreased by 4.5% to 45.8 million tonnes on the previous porting medicines, foodstuffs and other commodities to year. Finland. Furthermore, Finnlines is an important carrier of industrial products, spare parts, machinery and equipment. The Finnlines Group’s turnover was EUR 484.0 (574.8) As an example, Finnlines’ Naantali–Långnäs–Kapellskär million in the reporting period, a decrease of 16% com- route is the most important western maritime route in safe- pared to the same period in the previous year. Result before guarding the security of supplies for Finland. Finnlines is the interest, taxes, depreciation and amortisation (EBITDA) was market leader in maritime transport between Finland and EUR 140.8 (169.8) million, a decrease of 17%. At the end of Sweden. the first quarter, Finnlines reacted promptly to the first signs of the widespread economic fallout of the ongoing crisis In 2020, we reached an important milestone in our EUR and initiated a cost saving plan to mitigate the Covid-19 im- 0.5 billion green newbuilding programme. All three ultra pact.e W were not, of course, immune, but our flexibility and green hybrid ro-ro vessels are now undergoing different agility, which are based on an in-depth industry knowledge, construction stages and the investment programme contin- allowed us to successfully implement the cost savings plan. ues as planned, on schedule and as budgeted. The vessels As a result, we maintained a feasible profitability throughout will be built with the latest technology available to ensure the latter part of the year and the result for the reporting pe- the lowest carbon dioxide and other emissions. In addition riod was EUR 69.7 (98.3) million, which we are very proud of. to lithium-ion battery systems that will allow zero-emissions 4 Finnlines has been operating regularly for many years on Finland’s most critical maritime routes and has always safe- guarded Finland’s security of supply and is able to provide the service in an envi- ronmentally friendly way, under market- based terms and without public support.